Last weekend’s game confirmed that Argentina are now a formidable rugby side, not that much confirmation was needed given that they smashed the All Blacks in New Zealand recently.? It won’t be easy for them to win the entire tournament tomorrow but just the fact that they could pull it off means that the Boks are in for a serious fight.
These are the mid rates at 6:00 today:
Brent Crude = $71.41 per barrel
- Despite bouncing around a little the Rand pretty much traded sideways yesterday, but after the week’s earlier gains it can be forgiven for taking the day off.? After opening on Monday at R17.40 to the Dollar we have moved into the low R17.20’s while thrice testing R17.14 over the past two days.? Let’s see if today’s closely watched US inflation report can help us move stronger still.??
- As has been the theme for most of this week the Rand was a beneficiary of positive Chinese headlines coupled with a weaker Dollar yesterday.? The Chinese story took hold on Tuesday when the biggest stimulus measures since the onset of COVID was announced, measures that set the resources sector alight while providing a major boost to the Rand as a commodity linked currency.? But the Chinese weren’t done there as yesterday a reading from their Politburo showed they will use “forceful” interest rate cuts while also deploying the “necessary fiscal spending” needed to achieve their 5% growth target.? Strong words that are definitely Rand positive.??
- The Chinese government has been criticised for their sluggish response to a worsening economic slump but that changed in a big way this week, much to the Rand’s delight.? The measures announced this week are usually reserved for a more formal government meeting held every December, so just the fact that they have brought things forward is proof of how serious they are at promoting growth.? It’s a big ship to turn around but the following from Reuters is encouraging:??The Politburo's endorsement of further stimulus "represents a strategic shift in macro policy, from piecemeal policies to a highly orchestrated package in the right direction," said Bruce Pang, chief economist China at Jones Lang LaSalle. "A pick-up in government spending will probably be sufficient to drive a turnaround in business confidence, market sentiment and economic activities, helping China to catch up with potential trend growth."
- Chinese headlines were Rand positive and despite a brief moment of Dollar strength a generally weaker greenback over the day helped us test R17.14 twice during the session.? Risk-on was the order of the day with US indices hitting fresh all-time highs meaning there was no need to buy the Dollar as a safe haven asset, and thus pushing the Dollar Index lower.? US data was robust, yet again, as initial jobless claims fell to a four month low of 218?000, durable goods orders came in flat when a -3% contraction was expected and it was confirmed that their economy grew at an annualised 3% over Q2.? Equities loved these stats as any lingering fears of a potential recession were eased while the Dollar Index fell for the sixth time in seven sessions.??
- The following is from CNBC underlines just how buoyant the US market has been this year and hopefully this risk-on sentiment continues which should help the Rand:??There’s one phrase that’s been echoing throughout the year: “all-time high.” Financial firm Oppenheimer noted the S&P500 index has touched new levels on more than 20% of trading days so far this year. If the narrative propelling markets forward – the promise of artificial intelligence and a soft landing for the US economy amid rate cuts – continues uninterrupted, the S&P is on track to finish 2024 more than 20% higher. Judging from economic data released yesterday, the narrative is progressing well.
- No local market data today and all eyes will be on the US PCE inflation report at 2:30pm, although with the FED confirming that they are now more interested in labour market dynamics it will take a big deviation from the PCE forecast 2.3% to significantly impact the currency market.??
- Possible USD mid-rate trading ranges in the Rand today are R17.05 and R17.35.
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